Mid Month Budget Checkup

January is the first month of my new budgeting method. As mentioned in my 2010 Financial Goals post, my goal is to budget my expenses for the current month based off of the prior months income. Basically, each month, I deposit the amount of money I plan to spend for that month in my checking account.  At the end of the month, any money remaining is transferred to savings.

The rest of my cash, including savings (Emergency Funds, Reserve Funds, General Savings), will stay in my Money Market account. Any deposit that comes in during the month is deposited into the Money Market account.

Using this method, I can clearly monitor how much money I have remaining to spend for the month without having to restrict my money to certain categories. For those of you that don’t like the idea of a strict monthly budget, this method may be a good idea for you. In order for this method to work though, you need to have a good idea of your normal monthly expenses. For me, it’s sort of like the envelope method but all of my cash is in one envelope (my checking account). Once the envelope is empty, there can be no more spending until the next month.

Here’s how things look as of 1/18/10:

This months budget was based on total monthly expenses of $4100.00. Based on the chart above, I’ve spent $3397.07 as of January 18, 2010.  (side note: The mortgage category includes the mortgage on my primary home and my rental property).

Right now, I have $702.93 remaining to spend until the end of January. I’m a little surprised I have that much left since mostly all of the bills are paid. The only remaining bills are for my monthly trash pickup ($24) and my cell phone bill ($77).

Does anyone else use this budget method? How does it work for you?

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